How to Trade In Your Car

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

Trading in a car is the Achilles’ heel of the car-buying process because it’s tough to get the dealer to give you the full value of your old car. But understanding how to trade in a car and how to gather offers will help you maximize your trade-in’s value and get a better overall deal.

When you trade in your car, your old vehicle’s value is deducted from the new car price. To get the highest amount, it’s essential to know that you can separately negotiate the trade-in value and the new car price.

We’ll break the trade-in process into separate steps and show you how to:

Price your trade-in

With NerdWallet’s car value tool — which uses pricing data from the National Automobile Dealers Association, or NADA — you can answer a few simple questions about your car to see the private-party price. Then, sign in to see the trade-in price range for your car, as well as other information about your car expenses.

TIME FOR A NEW RIDE?

First, find out what your car is worth. Quickly see your car’s trade-in and private party values.

It’s a good idea to consult trade-in values from multiple pricing guides, like Kelley Blue Book and Edmunds. These appraisal tools ask for additional details about your car. Be sure to include all the car’s options, the correct mileage, a realistic condition level and your ZIP code for the most accurate value.

With these figures, you can set a target trade-in price range for your negotiations.

Solicit quotes for your trade-in

Before you get trade-in quotes from dealerships, collect the documents and other items you’ll need, which may include:

Vehicle title (often called a “pink slip”)

Auto loan payoff and account information (if you have an auto loan)

Current vehicle registration

Driver’s license

All vehicle keys

To get quotes, call or email dealerships’ internet departments. Tell them you’d like to buy a car there but want a fair price for your trade-in. They may give you a trade-in estimate based on your description of your vehicle’s condition. Most dealers will only give firm trade-in quotes after a physical inspection of the car.

Call at least two dealerships to make an appointment for a trade-in appraisal with the used-car manager. Consider starting at CarMax, if there’s a branch near you, to secure a no-haggle offer that’s good for seven days.

Choose an offer

Keep the trade-in and purchase negotiations separate and check each price against online guides.

Remember, the trade-in price is really just a credit deducted from the negotiated new car price. So, look for the lowest overall price after making this calculation.

While researching trade-in values and comparing offers, also consider your car’s private-party price. If that figure is much higher than its trade-in price, you might decide to sell your car yourself.

Close the deal

When you own your car outright, trading in your car is simple: The trade-in value is deducted from the new car price. You then pay the remaining amount for the new car with cash or with an auto loan.

If you’re downsizing and your trade-in is worth more than the new car, the dealership will give you a check for the balance. If money is owed to you, be sure to get the exact amount in writing.

The trade-in process is a little more complicated when you have a car loan.

Things can get a bit more complicated when you still owe money on your trade-in.

If the trade-in value is worth more than the remaining balance on your auto loan, this difference (the equity) is credited to the sale price of the new car.

But if you’re upside-down on your car loan for your trade-in, meaning you owe more than your car is worth, you’ll have to pay this difference when you trade it in. For example, if your vehicle is valued at $3,500 but you owe $4,000, you’ll need to pay an extra $500.

Here are several tips to help you handle this situation:

Try to make a cash payment for the difference (the negative equity)

Avoid rolling the negative equity into the new car loan; only do so if it’s a small amount

If you’re significantly upside-down, consider waiting until you have equity in the car before you trade it in

Compare auto insurance rates

We want to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and safe by following our posting guidelines, and avoid disclosing personal or sensitive information such as bank account or phone numbers. Any comments posted under NerdWallet's official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise.

Disclaimer: NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions. Pre-qualified offers are not binding. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.